The Fed held rates steady. On the macro front, by the end of 2025, the total assets of central state-owned enterprises (SOEs) exceeded 95 trillion yuan, with fixed-asset investments reaching 5.1 trillion yuan, of which 2.5 trillion yuan was invested in strategic emerging industries. Total annual profits reached 2.5 trillion yuan. The State-owned Assets Supervision and Administration Commission (SASAC) stated it will solidly advance the establishment of new central SOEs and strategic reorganizations, research and draft documents to promote the cultivation of emerging pillar industries by central SOEs, and explore the formation of an "AI+" industrial community. Overseas, the Federal Reserve kept the benchmark interest rate unchanged at 3.50%-3.75%, pausing action after three consecutive 25-basis-point cuts, which was in line with market expectations. In a press conference, Powell stated that a rate hike is not anyone's baseline assumption for the next move, he does not believe the Fed will lose its independence, and he would advise the next Fed Chair to stay away from politics.
Stock indices diverged. In the spot market, the three major A-share indices saw mixed and volatile trading, with the Shanghai Composite Index rising 0.27% to close at 4151.24 points, while the ChiNext Index fell 0.57%. Sector-wise, most industry indices gained, with the Nonferrous Metals, Petroleum & Petrochemicals, and Coal sectors rising over 3%, while Media, National Defense & Military Industry, and Beauty & Personal Care led the declines. The combined turnover on the Shanghai and Shenzhen exchanges rose to approximately 3 trillion yuan. Overseas, the three major US stock indices closed mixed, with the Nasdaq Composite rising 0.17% to 23,857.45 points.
Stock index futures maintained a premium. In the futures market, regarding basis, the basis for IF, IC, and IM continued to recover, with the front-month contracts maintaining a premium. In terms of volume and open interest, trading volume for stock index futures decreased, while open interest for IH and IF increased.
The pace of fund selling in the domestic market shows distinct phased characteristics. Initially, selling primarily targeted products related to the CSI 300 and SSE 50 indices. In later stages and currently, the focus of selling has shifted to the CSI 1000 index. The incremental portion from 2025 has been fully sold off, and selling has begun to touch the existing stock portion, suggesting the overall selling pressure may be nearing its end. For comparison, the scale of the CSI 500 index decreased by only 13% over the same period, indicating relatively limited outflow pressure and demonstrating relative strength. Watch for opportunities to go long on stock indices.
Risks include potential downside for stock indices if domestic policy implementation falls short of expectations, overseas monetary policy proves more aggressive than anticipated, or geopolitical risks escalate.
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